City move increased project’s risk, first witness in police HQ inquiry testifies By: Joyanne Pursaga Posted: 1:16 PM CST Tuesday, Feb. 10, 2026 Last Modified: 5:12 PM CST Tuesday, Feb. 10, 2026 Updates

A key contract change related to the Winnipeg Police Service headquarters project was highlighted Tuesday as an extremely rare move that raised the city’s risk.

Barb D’Avignon, the city’s manager of purchasing, was the first witness to testify at the public inquiry into the project, which began Tuesday morning.

D’Avignon was asked about documents that note she warned others the city’s decision to reduce a $40-million construction bond required for a project of such size to $25 million in early 2011 posed a “medium to high risk.” The bond was linked to an $80-million construction contract for the project.

“Never seen it before and I’ve never seen it again,” D’Avignon said about the reduced amount.

“Never seen it before and I’ve never seen it again.”

The bond, also known as a performance bond, reflects the amount of money a construction company must put up to guarantee it can complete the work. If the work wasn’t completed, the city could cash in the bond.

Concerns surrounding the police headquarters project at 245 Smith St. have plagued city council for years. The city bought the former Canada Post building at Smith Street and Graham Avenue in 2009 to replace the police HQ in the Public Safety Building on Princess Street, which has since been demolished.

The building opened in June 2016 at a cost of about $214 million, well above its original $135-million price tag, and an external audit found the project was severely mismanaged.

On Tuesday afternoon, a lawyer for Caspian Construction, a key contractor on the project, noted the lower bond amount would apply to any bidder of the contract.

“When that bond amount was lowered, it wasn’t lowered specifically for Caspian… Anyone who wanted to take advantage of that lower amount could do that,” said George Orle.

D’Avignon confirmed she had told RCMP in a witness statement that “putting the bond down to $25 million allows the small guys in” with an intent “to allow more small bidders to bid.”

The RCMP conducted a lengthy investigation into fraud and forgery allegations related to the project, but no criminal charges were laid.

On Tuesday, D’Avignon also confirmed the bond amount could be changed by the city or its chief administrative officer.

Jason Ruby, manager of finance for the city’s public works department, who appeared as the second witness, shared the timeline of cost increases on the project.

Ruby noted city council approved a budget of $135 million for the project in 2011, including the price to buy the property.

That price had risen to $209.8 million by Dec. 11, 2013, with the redevelopment portion of the project rising to $178 million from $105 million.

“Building to this standard exceeded the original (cost) estimate.”

A city report from that date notes police HQ has special construction requirements, including that staff can continue to operate in a disaster and withstand fire for at least two hours.

“Building to this standard exceeded the original (cost) estimate,” the report notes.

The same report notes the HQ’s final design was not completed until April 2013, with some cost estimates to meet that standard determined when only 30 per cent of the design had been completed.

The city later decided to install safety bollards along sidewalks outside the building, as well as security doors and other improvements that raised the total price to $214 million by fall 2025.

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The highly anticipated public inquiry is scheduled to include 48 days of hearings, involving 33 witnesses, before it wraps up in mid-June.

Garth Smorang, the inquiry’s commissioner, noted the process is meant to explore the City of Winnipeg’s ability to carry out large construction projects.

“It is also to determine any measures necessary to restore public confidence in the ability of the City of Winnipeg to implement large-scale construction projects in a manner which is cost-effective, timely, efficient and ethical,” he said.

joyanne.pursaga@freepress.mb.ca

X: @joyanne_pursaga

Joyanne Pursaga
Reporter

Joyanne is city hall reporter for the Winnipeg Free Press. A reporter since 2004, she began covering politics exclusively in 2012, writing on city hall and the Manitoba Legislature for the Winnipeg Sun before joining the Free Press in early 2020. Read more about Joyanne.

Every piece of reporting Joyanne produces is reviewed by an editing team before it is posted online or published in print — part of the Free Press‘s tradition, since 1872, of producing reliable independent journalism. Read more about Free Press’s history and mandate, and learn how our newsroom operates.